Popular file-trading networks such as Kazaa and Morpheus would be outlawed under a new bill that enjoys broad support from top Democrats and Republicans in the U.S. Senate.

Their legislation says "whoever intentionally induces any violation" of copyright law would be legally liable for those violations, a prohibition that would effectively ban file-swapping networks and could also imperil some consumer electronics devices.

Proponents argue that the bill focuses on curbing illegal activity on the Internet. "In the film 'Chitty Chitty Bang Bang,' the leering 'Child Catcher' lured children into danger with false promises of 'free lollipops,'" said Senate Judiciary Chairman Orrin Hatch, R-Utah. "Tragically, some corporations now seem to think that they can legally profit by inducing children to steal; that they can legally lure children and others with false promises of 'free music.'"

The Inducing Infringement of Copyrights Act, which was made public Wednesday, represents the latest legislative attempt by large copyright holders to address what they see as the growing threat of peer-to-peer networks rife with pirated music, movies and software. Violations of the IICA would be punished with civil fines and, in some circumstances, lengthy prison terms.

Mitch Bainwol, chairman of the Recording Industry Association of
America, praised the IICA as a "narrowly focused but meaningful" proposal that "places the spotlight squarely on the bad actors who have hijacked a promising technology for illicit means and ignoble profits." The Entertainment Software Association, which represents video game makers, called the IICA an "important and valuable tool to fight piracy." The Business Software Alliance also announced its support.

Targeting a court decision
The IICA is designed to overturn an April 2003 ruling from a federal judge in Los Angeles that said file-swapping services StreamCast Networks and Grokster were legal to operate.

In that decision, which the entertainment industry has appealed to the 9th Circuit, U.S. District Judge Stephen Wilson wrote that "Grokster and (Morpheus operator) StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights." Wilson said those networks were not as centralized as Napster, which the 9th Circuit in 2001, and could continue to exist.

"This carefully drafted, bipartisan bill would respond to this erroneous decision by confirming that existing law should allow artists to bring civil actions against parties who intend to induce others to infringe copyrights," Hatch said.

An early version of the IICA seen by CNET News.com was called the
Inducement Devolves into Unlawful Child Exploitation Act, or Induce Act. The final version appears to be identical.

Critics were assailing the measure even before it was introduced, saying that in addition to outlawing peer-to-peer networks, it could imperil products like ReplayTV and even the VCR. Jessica Litman, a professor at Wayne State University who specializes in copyright law, said the language was "worded so broadly" that it would put Web sites such as Tucows, which hosts peer-to-peer clients like the Morpheus software, at risk for "inducing" infringement.

Under existing law, companies are not liable for "vicarious copyright infringement" performed by their users, said Mike Godwin, a lawyer at the advocacy group . That legal doctrine permits Sony to sell VCRs, TiVo to sell digital TV recorders and Apple Computer to sell iPods, even though some fraction of their customers use them for copyright infringement.

If the IICA were to become law, "let's say that you're selling an MP3 player and it turns out that the MP3 player can be used to move copyrighted material around really easily," Godwin said. "People start buying your MP3 player. Do you want a world where courts can say, 'Hey buddy, you're liable for copyright infringement?'"

Critics of the IICA have suggested that it also might have the effect of overturning the Supreme Court's 1984 decision in the Sony v. Universal City Studios case, often referred to as the "Betamax" lawsuit. In that 5-4 opinion, the majority said VCRs were legal to sell, because they were "capable of substantial noninfringing uses." But the majority stressed that Congress had the power to enact a law that would lead to a different outcome.

Leahy, the top Democrat on the Senate Committee on the Judiciary, downplayed those concerns in a statement. "The makers of electronic equipment, the software vendors who sell e-mail and other programs, the Internet service providers who facilitate access to the Web--all of these entities have nothing to fear from this bill," Leahy said. "So long as they do not conduct their businesses with the intention of inducing others to break the law--and I certainly have not heard from anyone who makes that claim--they should rest easy."

A Senate Judiciary aide who spoke at length on condition of anonymity said concerns about the bill are misguided. The aide argued that the bill essentially reiterates criminal sanctions that already exist and is far less intrusive than other proposals in the Senate--such as one introduced in March 2002 by Sen. Fritz Hollings, D-S.C.--that sought to regulate technology directly.

In the Grokster case decision, Judge Wilson noted that
"additional legislative guidance may be well-counseled." The Senate aide said that "could be interpreted as a request for the status quo, if it is not answered" by Congress.